If developed countries' citizens want to feel slightly better about their economies' slow growth and high unemployment, they should contemplate how much worse matters could be without the institutions that they have.
Interpretation
This quote emphasizes the importance of institutions in stabilizing economies, particularly in developed countries with slow growth and high unemployment.
Raghuram Rajan's quote suggests that citizens of developed nations should appreciate the role of their institutions in mitigating economic challenges, such as slow growth and high unemployment. Rather than focusing solely on the negatives, contemplating the potential worse outcomes in the absence of these institutions can foster a sense of gratitude and perspective, highlighting how essential these frameworks are to maintaining economic stability and societal welfare.
In practice
In a discussion about economic challenges during a community meeting.
The U.S. should worry about the effects of its polices on the rest of the world. We would like to live in a world where countries take into account the effect of their policies on other countries and do what is right, broadly, rather than what is just right given the circumstances of that country.
Customers often value a good more when its price goes up. One reason may be its signaling value. An expensive handcrafted mechanical watch may tell time no more accurately than a cheap quartz model; but, because few people can afford one, buying it signals that the owner is rich.
The problem with forbearance is that it always looks like a good thing to do until it stops working.
Perhaps the hardest challenge has been to persuade the public, impatient for rapid growth, of the need to ensure stability first. Growth, it is argued, is always more important, regardless of the looming economic risks.
Too many years away from academia renders you pretty incompetent at research and teaching. So I had to go back.
The gap in India has always been between the promise and the execution.
Let's not only provide a jumpstart to the economy and immediately or save 3 million jobs, but let's also put a down payment on some of the structural problems that we have in our economy.
The only way to make sure no bank is too big to fail is to make sure no bank is too big.
The world needs banking but it does not need banks.
What many economists fail to understand is that poor people are no less concerned about improving their lot and that of their children than rich people are.
If farming were to be organised like the stock market, a farmer would sell his farm in the morning when it was raining, only to buy it back in the afternoon when the sun came out.
My premise is not to tax to destroy the wealth of the wealthy; it's to increase the wealth of the bottom and the middle class.
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